Koala Technologies is considering the acquisition of Laser Industries in a stock$-$for$-$stock exchange. Selected financial

data for the two companies is shown below. An immediate synergistic earnings benefit of $$2\mathrm{.}5$ million is expected in

this merger.

Koala Laser

Sales $($millions$)$ $$90$ $$10$

Net income $($millions$)$ $$9\mathrm{.}4$ $$1\mathrm{.}2$

Common shares outstanding $($millions$)4\mathrm{.}00\mathrm{.}8$

Earnings per share $$2\mathrm{.}35$ $$1\mathrm{.}50$

Common stock $($price per share$)$ $$35\mathrm{.}00$ $$27\mathrm{.}00$

Calculate the post$-$merger EPS if the Laser shareholders accept an offer of $$33\mathrm{.}25$ a share in a stock$-$for$-$stock exchange.

Question $4$Answer

a$.$

$$2\mathrm{.}75$

b$.$

$$2\mathrm{.}21$

c$.$

$$2\mathrm{.}23$

d$.$

$$2\mathrm{.}25$